Cadila Healthcare reports 89.6% CAPEX growth in 2016 and 11.4% Revenue growth
13-05-2016 • About Cadila Healthcare (
$CADILAHC) • By InTwits
Cadila Healthcare reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Cadila Healthcare is a fast growth stock: FY2016 revenue growth was 11.4%, 5 year revenue CAGR was 16.2% at FY2016 ROIC 27.0%
- Cadila Healthcare has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 7.1%.
- CAPEX is quite volatile: ₹9,718m in FY2016, ₹5,125m in FY2015, ₹4,840m in FY2014, ₹7,243m in FY2013, ₹12,536m in FY2012
- The company has highly profitable business model: ROIC is 27.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.7x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 11.4%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.62 pp from 6.3% to 6.9% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 16.7% and was growing since that time.
Net Income margin increased on 2.6 pp from 13.5% to 16.1% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 10.6% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 10.3% in FY2016. The company showed small CAPEX/Revenue decline of 1.5 pp from 11.8% in FY2013 to 10.3% in FY2016. Average CAPEX/Revenue for the last three years was 7.7%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 6.0%.
Return on investment
The company operates at high and attractive ROIC (27.0%) and ROE (31.7%). ROIC increased on 5.1 pp from 21.8% to 27.0% in FY2016. ROE increased slightly on 1.8 pp from 29.9% to 31.7% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 15.6% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2013 at 23.6% and was growing since that time.
Leverage (Debt)
Debt level is 0.7x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 1.1x to 0.7x in FY2016. Debt decreased on 7.9% while cash increased on 3.8%. During the last 5 years Net Debt/EBITDA topped in FY2013 at 2.2x and was declining since that time.
Cadila Healthcare has short term refinancing risk: cash is only 45.0% of short term debt.
Financial and operational results
Cadila Healthcare ($CADILAHC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 50,900 | 61,552 | 70,600 | 84,971 | 94,694 | 11.4% |
| EBITDA | 10,987 | 10,784 | 11,795 | 17,700 | 23,489 | 32.7% |
| Net Income | 6,526 | 6,535 | 8,036 | 11,485 | 15,226 | 32.6% |
Balance Sheet
|
|---|
| Cash | 4,666 | 5,838 | 5,488 | 6,699 | 6,953 | 3.8% |
| Short Term Debt | 9,728 | 14,976 | 13,382 | 15,009 | 15,456 | 3.0% |
| Long Term Debt | 13,223 | 14,260 | 13,622 | 11,504 | 8,964 | -22.1% |
Cash flow
|
|---|
| Capex | 12,536 | 7,243 | 4,840 | 5,125 | 9,718 | 89.6% |
Ratios
|
|---|
| Revenue growth | 14.0% | 20.9% | 14.7% | 20.4% | 11.4% | |
| EBITDA growth | 8.1% | -1.8% | 9.4% | 50.1% | 32.7% | |
|
|---|
| EBITDA Margin | 21.6% | 17.5% | 16.7% | 20.8% | 24.8% | 4.0% |
| Net Income Margin | 12.8% | 10.6% | 11.4% | 13.5% | 16.1% | 2.6% |
| CAPEX, % of revenue | 24.6% | 11.8% | 6.9% | 6.0% | 10.3% | 4.2% |
|
|---|
| ROIC | 21.9% | 15.9% | 15.6% | 21.8% | 27.0% | 5.1% |
| ROE | 27.4% | 23.6% | 25.2% | 29.9% | 31.7% | 1.8% |
| Net Debt/EBITDA | 1.7x | 2.2x | 1.8x | 1.1x | 0.7x | -0.4x |
Peers in Pharmaceuticals
Below you can find Cadila Healthcare benchmarking vs. other companies in Pharmaceuticals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mangalam Drugs & Organics ($MANGALAM) | 16.6% | -18.2% | -2.1% | 79.8% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 39.9% | 40.4% | 42.4% | 70.2% | - |
| Lyka Labs ($LYKALABS) | 41.9% | -25.7% | -22.6% | 68.7% | - |
| Marksans Pharma ($MARKSANS) | 16.7% | 23.3% | 43.3% | 26.8% | - |
| Torrent Cables ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 16.7% | 14.7% | 12.6% | 8.6% | 15.2% |
|---|
| Cadila Healthcare ($CADILAHC) | - | 20.9% | 14.7% | 20.4% | 11.4% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | 59.6% |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 29.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | - |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | - |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 19.1% |
|---|
| Cadila Healthcare ($CADILAHC) | 21.6% | 17.5% | 16.7% | 20.8% | 24.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | 15.8% |
| Wintac ($WINTAC) | - | - | - | 22.8% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 21.5% | - |
| Ipca Laboratories ($IPCALAB) | 11.2% | 8.3% | 11.6% | 17.8% | - |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 7.7% | 7.5% | 5.7% | 6.2% | 9.4% |
|---|
| Cadila Healthcare ($CADILAHC) | 24.6% | 11.8% | 6.9% | 6.0% | 10.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Marksans Pharma ($MARKSANS) | -142.4% | 34.9% | 33.8% | 41.2% | - |
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 34.1% | 29.0% | 32.4% | 35.3% | - |
| Abbott India ($ABBOTINDIA) | 29.6% | 26.9% | 30.5% | 34.2% | - |
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 15.5% |
|---|
| Cadila Healthcare ($CADILAHC) | 21.9% | 15.9% | 15.6% | 21.8% | 27.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | - |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 2.8x | 4.5x | 6.0x | 6.2x | - |
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | - |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | - |
| |
|---|
| Median (48 companies) | 1.4x | 1.2x | 0.3x | 0.0x | 1.1x |
|---|
| Cadila Healthcare ($CADILAHC) | 1.7x | 2.2x | 1.8x | 1.1x | 0.7x |
